news release

 North/South business insolvency divide broadens in November

 

Nottingham, 22 December 2011 – The latest Insolvency Index from Experian®, the global information services company, reveals a widening North versus South business failure divide, with southern firms faring far better than their northern counterparts. London and the South East of England saw insolvency rates[1] decrease between October and November, while company failures increased in the North East, North West and Yorkshire.
 
During November, insolvency rates were highest in the North West (0.14 per cent), North East (0.12 per cent) and Yorkshire (0.11 per cent).  By comparison, the South East, South West and Greater London recorded failure rates of 0.07 per cent, 0.08 per cent and 0.08 per cent respectively.
 
Across the country, there was a small month-on-month improvement in the rate of business insolvencies, from 0.10 per cent in October to 0.09 per cent in November.  Out of the UK’s business population, this represents 1,736 firms failing in November.  In November 2010, the insolvency rate 0.07 per cent.
 
The average financial strength[2] of businesses in the UK deteriorated by 0.5 per cent in November, falling to 78.07 from 78.44 in October.  In November 2010, the average financial strength score was 81.31. 
 
Max Firth, Managing Director for Experian’s Business Information Services division in the UK & Ireland, said: “The latest insolvency index highlights that some businesses continue to need to assess the risk strategies they have in place very carefully. They need first to understand the risks they are exposed to and then protect themselves from debt that could be detrimental to their business on a regular ongoing basis.”
 
The UK’s biggest sectors
Of the five biggest industry sectors – business services, building/construction, property, IT and leisure/hotels – property was the only one that saw its improving insolvency rate improve - from 0.07 per cent in November 2010 to 0.06 per cent November 2011.  It was also the sector to see the biggest improvement from October when the rate was 0.08 per cent.
 
SMEs
Although smaller businesses (with 3 to 10 employees) have generally managed to maintain lower rates of insolvencies over the past year, they experienced the biggest deterioration in financial strength between November 2010 (an average of 81.80) and November 2011 (an average of 81.04).
 

 


Region

Insolvencies
Nov-11

% change from
Nov-10

% of business population failing
Nov-11

% of business population failing
Nov-10

Financial Strength Score
Nov-11

Financial Strength Score
Nov-10

Scotland

            81

-6.9

0.07%

0.07%

     79.26

     81.16

North East

            49

16.7

0.12%

0.10%

     79.19

     81.52

North West

          265

61.6

0.14%

0.09%

     77.57

     80.75

Yorkshire

          134

7.2

0.11%

0.10%

     78.25

     81.32

Wales

            62

40.9

0.11%

0.08%

     78.46

     80.92

West Midlands

          157

28.7

0.10%

0.08%

     77.59

     80.44

East Midlands

          100

12.4

0.09%

0.08%

     79.01

     81.67

Eastern

          166

46.9

0.09%

0.06%

     79.22

     82.18

South West

          121

26.0

0.08%

0.06%

     80.52

     82.96

Greater London

          371

15.2

0.08%

0.06%

     75.57

     80.17

South East

          230

25.0

0.07%

0.06%

     79.45

     82.47

Grand Total

       1,736

25.1

0.09%

0.07%

     78.07

     81.31

Source: pH, an Experian company

 

Number of employees

Insolvencies
Nov-11

% change from
Nov-10

% of business population failing
Nov-11

% of business population failing
Nov-10

Financial Strength Score
Nov-11

Financial Strength Score
Nov-10

1-2

          232

20.2

0.05%

0.04%

     82.07

     82.56

3-5

          276

29.6

0.12%

0.10%

     81.05

     81.92

6-10

          224

6.2

0.17%

0.16%

     81.03

     81.67

11-25

          251

28.1

0.24%

0.19%

     81.08

     81.42

26-50

            83

6.4

0.17%

0.16%

     81.07

     81.48

51-100

            46

35.3

0.17%

0.12%

     81.19

     81.49

101-500

            40

37.9

0.15%

0.11%

     82.23

     82.67

501+

            11

22.2

0.12%

0.10%

     85.70

     85.23

Grand Total

       1,736

25.1

0.09%

0.07%

     78.07

     81.31

Source: pH, an Experian company

 

 

Sector

Insolvencies
Nov-11

% change from
Nov-10

% of business population failing
Nov-11

% of business population failing
Nov-10

Financial Strength Score
Nov-11

Financial Strength Score
Nov-10

Extractive Industries

            -  

-100.0

0.00%

0.07%

     80.09

     82.86

Oil

              2

0.0

0.07%

0.07%

     83.43

     85.97

Building & Construction

          261

15.0

0.16%

0.13%

     75.87

     77.78

Building Materials

              2

-50.0

0.05%

0.11%

     78.21

     80.13

Chemicals Industry

              4

0.0

0.15%

0.15%

     80.03

     81.89

Diversified Industrials

            42

35.5

0.20%

0.14%

     76.63

     78.19

Electricals

            13

8.3

0.14%

0.13%

     78.27

     79.57

Engineering

            44

-6.4

0.11%

0.12%

     78.44

     79.66

Printing, Paper & Packaging

              5

-

0.15%

0.00%

     78.07

     79.06

Textiles & Clothing

            20

17.6

0.14%

0.12%

     74.64

     76.76

Breweries

            -  

-

0.00%

0.00%

     75.67

     79.67

Spirits, Wine & Tobacco

            -  

-

0.00%

0.00%

     78.40

     83.09

Food Manufacturing

              8

33.3

0.12%

0.09%

     76.46

     78.26

Pharmaceuticals

              1

-

0.08%

0.00%

     81.61

     82.31

Wholesaling

            77

22.2

0.13%

0.10%

     78.15

     80.05

Leisure & Hotels

          144

27.4

0.16%

0.13%

     76.96

     79.68

Media

            42

-8.7

0.07%

0.07%

     78.35

     80.82

Food Retailing

            20

17.6

0.12%

0.11%

     73.16

     75.78

Non-Food Retailing

            95

37.7

0.11%

0.08%

     76.63

     79.05

Servicing / Repair

              8

166.7

0.11%

0.04%

     80.81

     82.62

Transport

            49

-9.3

0.09%

0.10%

     76.92

     78.74

Utilities

              1

-50.0

0.04%

0.09%

     75.51

     79.83

Postal & Telecommunications

            11

37.5

0.13%

0.09%

     73.52

     76.55

Agriculture, Forestry & Fishing

            12

300.0

0.06%

0.01%

     83.42

     85.28

Banking & Financial Services

            65

51.2

0.13%

0.08%

     81.93

     84.17

Health & Household

            -  

-

0.00%

0.00%

     77.41

     79.04

Business Services

          444

40.1

0.08%

0.06%

     77.69

     81.80

Hiring & Leasing

            23

35.3

0.17%

0.12%

     80.35

     81.83

Property

            90

-13.5

0.06%

0.07%

     80.17

     82.46

Other Services

            98

40.0

0.04%

0.03%

     83.21

     86.14

Plastics & Rubber

            11

0.0

0.17%

0.16%

     77.25

     78.26

Insurance

              6

0.0

0.05%

0.05%

     82.64

     84.39

IT

            66

53.5

0.06%

0.04%

     80.14

     83.75

Motor Traders

            50

56.3

0.14%

0.09%

     78.66

     80.39

Grand total

       1,736

25.1

0.09%

0.07%

     78.07

     81.31

Source: pH, an Experian company

 

ENDS

 

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Contact:

Ms Serj Heera 

PR Manager

0115 992 2773/07837 652169

serjeet.heera@uk.experian.com

 

About Experian
Experian is the leading global information services company, providing data and analytical tools to clients in more than 80 countries. The company helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score, and protect against identity theft.

Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended 31 March 2011 was US$4.2 billion. Experian employs approximately 15,000 people in 41 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and São Paulo, Brazil. 

For more information, visit http://www.experianplc.com



[1] The insolvency rate is calculated by comparing the number of businesses that failed with the total business population in Great Britain.

[2] The financial strength score predicts the likelihood of a business failing in the next 12 months, with 100 being the least likely to default and 1 being the most likely.

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